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The Weekly paper of the New Communist Party of Britain

On the wages front

by New Worker correspondent

THE ANNUAL consultation by the Government’s Low Pay Commission (LPC) on statutory pay rates is underway, with trade unions seeking increases and to “end the scandal of low pay & insecure employment”. It is also the occasion for businesses and trade associations to say these objectives are unaffordable.

Dave Ward, General Secretary of the Communication Workers Union (CWU), said that “Low pay and insecure employment are the very worst aspects of today’s world of work and our union has been campaigning on these themes for many years – but this year, when we’ve seen how frontline workers have carried the nation through this awful COVID-19 crisis, surely we have to make sure that statutory pay rates are significantly increased.”

He demanded a national minimum wage of £10 per hour across the UK with an extra 75p for London workers. This would be an increase from the present hourly figure of £8.72, which came into operation in April. That the present figure is clearly inadequate can be seen from the fact that 56 per cent of people in poverty are actually in a working family, compared with 39 per cent 20 years ago.

Ward notes that while most of his members in the postal and telecommunications sector are paid well above the statutory minimum, there are nevertheless around 4,000 who are on or near the current statutory minimum. These are largely employed in cleaning, security, catering and call centre roles by several different companies and employment agencies, including Compass, Royal Mail Property and Facilities Solutions, Quadrant and ISS.

Amongst those are several hundred postmasters who are classed as self-employed, as are some delivery-driver members – who are not entitled to statutory minimum pay because of this status.

In many respects the statutory minimum wage is not administered effectively. It is not just in Leicester sweatshops that it is ignored. According to Employment Tribunal records, since 2017, only one of the 141 firms found to have underpaid the minimum wage were actually fined for it. 2018–19 saw the greatest number of underpayments ever, amounting to £24.4 million for 220,000 workers. Since the Blair-era legislation came into being only 14 have been subject to criminal prosecution, incurring average fines of less than £3,000.

The CWU is calling for a single enforcement agency with statutory powers and a large increase in penalties for employers found to be breaking the law.

Shop-workers union USDAW is also seeking an increase to £10 per hour, adding that there should be a minimum contract of 16 hours per week and a ban on zero-hour contracts, better sick pay for all workers, and a proper social security system because it believes Universal Credit does not provide a safety net.

General Secretary Paddy Lillis said: “The coronavirus pandemic has clearly demonstrated how reliant the country is on low-paid key workers.

“Millions of low-paid workers have provided essential services to help ensure the country is fed, healthy and safe through the lockdown and will continue to do so.

“There must be lasting and fundamental changes to the way society views our lowest paid workers.”

He also highlighted the need to abolish youth rates that mean under-25-year-old workers get a particularly bad deal.

Predictably, the bosses were not best pleased. The Association of Convenience Stores moaned that this year’s rise forced many small shops to reduce hours of staff and instead for owners to work longer hours themselves.

Some bosses are demanding that low paid workers get a rise however, but only because they don’t pay it directly. According to Care Forum Wales, which represents 500 care homes and domiciliary care companies across the land of song, they are being ignored whilst almost 900,000 public sector workers, including teachers and doctors, are getting above-inflation pay rises.

The Forum claims that its members cannot afford to pay decent wages because pay rates are effectively determined by councils and health boards, who set the level of fees that care homes and domiciliary care companies receive.

Sanjiv Joshi, managing director of the Caron Group, which has 14 homes in Wales, demanded that: “It’s time the people who commission social care services in Wales, local authorities and health boards, seriously addressed the issue of low pay that has persisted for so long in the sector which means that our carers are paid either at the National Living Wage or very close to it.

“The chronic underfunding of social care means that their pay rates are based on the statutory minimum wage or close to it. There is very little that providers can do about this.

“It was great for the First Minister in Wales to make the gesture of acknowledging care workers with the one-off £500 bonus payment but the authorities and the Welsh Government need to review the pay structures so we can pull our care workers out of poverty.

“In Wales we can start the process by eliminating the pay gap for carers, between the public sector and the Independent care sector.”

Mario Kreft, chair of the Forum, added: “The social care sector is of national strategic importance. Most of the people in care homes in Wales are publicly funded by local authorities.

“After 25 years of local authorities managing the market, we have a very fragile sector that was in a critical state even before the coronavirus pandemic struck.”

Neither seems to mention that a large portion of the fees paid by councils end up in the pockets of the shareholders in private care home companies, whose highest paid employees are accountants who advise on reducing taxation by inventing strings of companies whose ultimate owner is a brass plate company in the Cayman Islands away from the eyes of the British taxman.

Christina McAnea, assistant general secretary of public sector union Unison, meekly said that the private provider model made delivering a “much-deserved wage boost” to care workers harder, but not impossible. Adding: “The Government must ensure all care operators pay staff at least the real living wage. It’s hardly a big step given the Prime Minister wanted this hourly rate for care workers as Mayor of London.”